In its 114 years of existence, the story of the Neiman Marcus Group (NMG) is full of chapters on social justice, free speech and civil rights. Consider Carrie Marcus Neiman co-founding the company in 1907, before women even had the right to vote.
And then consider the “Soul of Stanley Marcus,” which was the headline of a D Magazine article published during the 90th birthday of former President and CEO Marcus in 1995. The magazine described Marcus as an “arbiter of taste and fashion” but also as someone who changed “the way Dallas thinks — not just about clothes and shopping, but about tolerance, culture, and living the civilized life.”
Now, as the retail industry emerges into a new, post-pandemic world, NMG is letting its progressive past inform its business and culture, while eyeing a future propelled by the company’s growth strategy and integrated ways of working.
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SEE RELATED STORY: Let Love Lead the Way
Cultivating a Culture of Belonging
As communities across the globe confront social justice issues around race, equity and the environment, the luxury retailer adds “Belonging” to the “Diversity, Inclusion and Equity” equation via the NMG|Way — which is not just a strategic approach that sits in a three-ring binder on an HR executive’s shelf, but an actionable manifest that is put into practice daily.
The NMG|Way reiterates the company’s guiding principle of exceeding the customer’s expectations by leading with love, forging key partnerships and leveraging technology. The values-driven approach is embedded in the company’s Environmental, Social, and Governance (ESG) strategy, with an end-goal of making life extraordinary for customers, associates, and the community through sustainability, Belonging, and philanthropy. The NMG|Way also bolsters the company’s multi-year-growth strategy, coined “Revolutionizing Luxury Experiences.”
“What we accomplish as an organization matters, but how we do it is what will be remembered,” noted Chief Executive Officer Geoffroy van Raemdonck. “Our NMG|Way culture is critical to our business strategy.”
It is a culture powered by people. As the Chief People and Belonging Officer at NMG, Eric Severson amplified the long-standing cultural behavior to “lead with love” at the company.” With “Belonging,” Severson is bringing the NMG|Way to life. But what does “Belonging” really mean?
For Dr. Darnisa Amante-Jackson, a racial equity strategist and educator, pursuing the concept of Belonging as part of diversity, equity and inclusion (DEI) is what sets leading schools, organizations and companies apart from others. In a June 29, 2020 LinkedIn Hello Monday article, she said, “Belonging is the sweet spot for us all. Belonging is where schools will see the biggest changes in the opportunity gap and Belonging is where companies will see the biggest change in retention and recruiting.” Belonging is also rooted deep within us; it’s a social need.
When asked to describe the NMG|Way, Severson, said, “It’s our culture. And while there are several components to it, it starts with our people strategy, which we call the Power of One. This captures the concept of the virtuous cycle. If each individual in our ecosystem, is in an environment where they can reach their full potential, then the whole organization becomes more powerful.”
Severson said the NMG|Way is embedded in the company’s core purpose, which is to “make life extraordinary for everybody in our ecosystem — our customers, our brand partners, our associates. When you foster an environment that does that, everything and everyone rises.”
The NMG|Way is also informed by Maslow’s “hierarchy of needs,” which has “love” right in the middle. “And it’s interesting, our Foundation has always been called The Heart of Neiman Marcus Foundation” Severson explained. “To us, Love is just another word for Belonging. There’s one thing that has always made Neiman Marcus and Bergdorf Goodman what they are, and that’s creating unique experiences customized for the individual. In today’s parlance, of course, it’s ‘personalization,’ and we still do it one-on-one like always, but we also use technology. No two people are alike. By understanding that first and foremost, you start to create an environment where everyone Belongs.”
Van Raemdonck noted that across the company’s locations, including Neiman Marcus and Bergdorf Goodman locations, the company’s 9,000-plus associates lead with love “and bring the power of our strategy to life. We make life extraordinary. With the world’s most desirable brand partners, our associates and style advisors are delivering exceptional products and intelligent services, enabled by our investments in data and technology.”
Connecting, Not Selling
Severson recounts a moment during the pandemic when a style advisor created a unique experience for a client who’s had a relationship with that advisor for 20 years. The company also flew one of its style advisors out to help a client plan her wedding. “Another one consulted with her client on colors for her house,” he said. “It’s about more than ‘selling,’ more than merchandise. It’s the human relationship that makes the overall experience extraordinary.”
Technology also plays a key role in offering this level of service and for nurturing the relationship. The company’s Stylyze platform and the launch of its proprietary app, CONNECT, are prime examples. “These technologies enhance our associates’ human ability to personalize and customize a client’s experience, which is special,” Severson said. “We take this same approach for our associates. We invest in platforms such as LinkedIn Learning, where their training curriculum is personalized, or NMG Discount Marketplace, where they can shop for thousands of products and services of their choice at a discount.”
In regard to leveraging innovation and technology, Severson said it is not meant to replace human interactions, but to enhance it. “We leverage artificial intelligence (AI) and technology to augment the years of technical experience, emotional intelligence, and good judgment our associates bring to the customer relationship, rendering it even more extraordinary,” he said. “The ‘analog’ component, the 1:1 client/associate relationship, has been our secret sauce since 1907. We’ve figured out how to turbocharge that through technology. Throughout the pandemic, customers and associates stayed in touch with our CONNECT app. It was therapeutic — because that’s the nature of the deep relationship between associates and their clients.”
NMG sees the first part of personalization as tailoring the goods and the services to the customer’s unique needs. The continuation of that connection is “true Belonging,” which is creating an environment where the customer can seamlessly become part of something larger: the NMG community. “The Heart of Neiman Marcus is the heart of something that’s not just about commerce,” CEO Van Raemdonck said. “It’s about the human relationship. And while, economically, we focus on customer lifetime value, which is an analytical term, underneath it is about the relationship with a client over their lifetime that is delivering value both to them and to us.” To demonstrate the cultural emphasis on the long-term, Severson also points to the company’s more than 300 tailors who frequently customize and extend the lifespan of their customer’s most-loved luxury items, as part of the company’s commitment to Circularity and the environment.
It’s important to note that what NMG is doing is not an industry standard. The company differentiates itself through a customer’s experience that is holistic. “It’s not just the store, it’s the experience of connecting with another person whether that’s via remote selling with one of our advisors or via technology,” Severson said. “It’s the experience of a collection of products and services, curated by a merchandising team with lifetimes of experience.”
Making It Work
What sets the NMG|Way apart from other approaches is that nurturing its culture is embedded into the company’s daily business, even playing a key role in the Revolutionizing Luxury Experiences growth strategy. And while other companies have put in place DE&I initiatives, NMG takes it a step further.
“We don’t only call it ‘diversity, equity, and inclusion,’” Severson explained. “There is a ‘brand’ associated with DE&I, about which some people are skeptical because they haven’t seen results. We’ve created our own brand for DEI, Belonging, to emphasize the feeling that we want everyone in the NMG ecosystem to experience. Our formula is this: diversity plus equity plus inclusion equals Belonging. The goal is Belonging for customers, for associates, and for our brand partners. But we know that for our stakeholders to experience Belonging, we have to actually execute on all three.”
Severson described how the company implements the diversity component of its Belonging strategy as “systematic,” in order to increase diversity throughout the organization. For example, that includes implementing diverse candidate slate requirements and requiring diverse hiring panels, especially for leadership positions. “We also do it in sourcing by identifying new sources of qualified diverse candidates. For example, over the last 18 months, by expanding our sourcing practices, we have increased the diversity of our Executive Development Program participants by 44%,” he said.
“The equity component of our strategy is about creating a level playing field in key talent processes like people development, succession management, and compensation,” Severson explained. “Last year, we trained all of our senior leaders in ‘bias interrupters,’ evidence-based practices that intentionally interrupt systemic bias in talent practices, providing them with a playbook of techniques for creating greater equity in everyday work process like hiring, selection, and performance management.”
The inclusion component of NMG’s Belonging strategy is focused on encouraging everyone to bring their whole selves to work through ongoing communications, in which leaders are trained in evidence-based techniques for increasing inclusion and continually updating policies and practices to make them more inclusive. “While there’s a lot still to do,” Severson acknowledged, “our efforts to increase a sense of Belonging are already paying off: in our People Strategy Survey this past September, our associates rated Belonging the #1 component of our associate value proposition, an eleven point improvement since we started this work 18 months ago.”
The rally call is, “You can be whoever you are,” which Severson said is a tangible element of the integrated “NMG Way of Working.” When asked if this approach is like offering flexible work, he said it is much more than that.
“We are leading with remote work,” he said. “It’s essentially our take on the concept of hybrid and remote working, which we adopted before COVID-19. We want people to focus on results. And they can figure out how to do it whenever, wherever, however best.”
During the pandemic, and amid restructuring, NMG made the choice to release some of its corporate office space leases in downtown Dallas. The offices were spread out in high-rises, as well as above its downtown store, Severson said. “We fundamentally recognized that we didn’t need to have a headquarters where everyone had to sit every day. We instead empower corporate associates to work wherever and however they best can. It’s been incredibly powerful in helping us attract and retain the best talent.”
Severson also said data from various studies show that women continue to bear a disproportionate amount of childcare, elder care, and home care responsibilities. “Our workforce is more than two-thirds female. Even aside from those facts, we knew that remote and flexible work would be a differentiator for us to enable our people to achieve their full potential, perform better, and want to stay here. Ultimately, it has proven itself out. It led us to decide that we’d hire from virtually anywhere for corporate jobs, wherever the best people are. And we’ll keep doing it after the pandemic. It’s working.”
“You probably heard about the Great Resignation? Right now, because of our differentiated policies, we’re bucking the trend,” he added.
When comparing 2019 to today, NMG’s time-to-hire rate has gone down 32 percentage points. The company is filling jobs significantly faster than 2019 “because we’re finding the best people we can, wherever they are in the United States, and letting them be and do their best,” Severson said. “The best people in the marketplace are starting to expect flexibility, and yet they know that this is unusual for them to be able to do their work where they want to do it.”
Severson said this is one example of an element of the company’s unique culture, called the NMG|Way of Working, that illustrates how NMG is adapting to the post-COVID world of work.
Active Listening
Another key element is active listening. In February of 2020, before the pandemic hit, Severson said the company conducted its first people strategy assessment and survey. “We asked associates to force rank the elements of the associate value proposition that mattered most to them because we wanted to know. If NMG is going to invest time, energy, and money, what matters most to you?”
He said NMG associates came back with a few components that rose above all others. “It was total rewards, career development, flexibility, and Belonging,” Severson said. “So that’s what we focused on. Eighteen months later, we sent the survey again to measure our associate sentiment and our progress. Unsurprisingly, in every one of the categories where we focused, the value proposition score from the associates improved in double digits.
In short, the NMG|Way is the DNA of the culture and it provides the foundation for the company’s multi-year growth strategy. “And it’s connected to our purpose, which we refer to as ‘Making Life Extraordinary.’ It’s for everybody in our ecosystem. It is integrated with our Environmental, Social, Governance (ESG) strategy and our core values, which includes sustainability, Belonging, and philanthropy.”
Revolutionizing Luxury Experiences focuses on the client’s point of view, “and listening to what he, she, and they want,” Severson said. “This remains true whether it’s a 30-year selling associate in the one-on-one relationship, or the AI guiding us. We are always introducing newness in the product as the customer evolves.”
“Stanley Marcus always talked about evolution,” Severson said. “We’re always evolving with the customer. Society’s always evolving. He was focused on social change, because to be successful in serving people, you have to be a good listener.”
As for where the Company is headed from here, CEO Van Raemdonck is clear on the long-term horizon, whether over five or 50 years. “NMG will always be making life extraordinary for everyone we have the good fortune to have a relationship with. Our associates and NMG|Way culture fuel every experience we create.” He acknowledges that the future isn’t set in stone, but is overwhelmingly confident that NMG has the people and the culture to evolve and exceed their customers’ expectations. “The strength of our relationships with the best brand partners in the world powers our ability to curate exclusive assortments, launches, and experiences. With the technology we’re building to meet and exceed our customers’ imaginations, there is nothing we can’t do.”
A Place Where Everyone Belongs
As Eric Severson noted, the NMG|Way culture is grounded in the company’s values as well as in the ways everyone works. The NMG|Way is also about cultibating a culture of Belonging. And it is supported with an openness and mindset of love and growth designed to make life extraordinary for everyone in and around the Neiman Marcus Group (NMG) ecosystem.
In a one-pager about the NMG|Way, the luxury retailer said as a woman co-founded and majority-women-led organization, as of December 2021, “women represent the majority of the Company’s Board of Directors, 54 percent of leaders SVP and above, 60 percent of VPs and above, and 68 percent of all corporate and store employees. In addition, 53% percent of the Company’s slightly more than 9,000 associates identify as racially or ethnically diverse.”
NMG said in fiscal year 2020, it outpaced the U.S. population in terms of Asian associates “at every level of the company.” The company said that at leadership levels, “we have strong Asian representation and are developing talent pipeline partnerships with groups like Prospanica and Fashion Scholarship Fund to increase Hispanic and Black representation, too.”
And as one of few large corporations with an openly gay CEO, “we also champion workplace equity for LGBTQ associates through our participation in the Human Rights Campaign’s Corporate Equality Index and our Foundation’s philanthropic support for LGBTQ nonprofits like True Colors United, amfAR, Black Tie Dinner, and more.”
Chris Demuth, Senior Vice President, People Services, ESG, Belonging & Corporate Philanthropy at the NMG, who recently joined the company, believes every associate has a responsibility to contribute to a culture of Belonging. She said that 20 years ago her education was in cultural diversity studies, and that she ended up with a PhD but never got to use it — until now.
“With Belonging, I feel like we’ve been able to take what the world and other institutions have been trying to do around diversity, equity and inclusion and frame it in a way that resonates so much more with people,” Demuth said. “In my short tenure, I’ve been blown away by the appetite and the openness for change, and a willingness to make change.”
For her part, Demuth experienced the culture of Belonging first-hand. She recounts a story of when she first joined NMG. Demuth had been in a 14-year relationship with her life partner, but couldn’t put her on her benefits. But the company was supportive, and listened, and made changes for all associates. “And this is not something that happens at other companies,” Demuth said. “Here, a conversation like that isn’t going to be brushed off. And this is really what’s been representative for me, personally, of Belonging. And it’s how I want to represent it for the rest of the company in the NMG|Way.”
But how do you put Belonging into practice? And how do you create a culture that is open to change? For NMG, the key was to lead by example and integrate an innovative use of technology.
Demuth said with the CEO being openly gay, “and saying, with full transparency, ‘This is who I am,’ makes it so much easier to lead, capturing hearts and minds, because you are putting yourself out there, fully ready for anything. I think we’re on to something different because we’re putting an exclamation point on Belonging where leaders are not afraid to show up and say who they are.”
For the technology solution, NMG teamed up with Kanarys, a technology company “focused on providing the tools organizations need to create long-term systemic change around diversity, equity, and inclusion challenges.”
Mandy Price, Co-Founder and CEO of Kanarys, said the company works alongside mid-size enterprises and Fortune 500 companies alike, helping them transform DEI work “with data, by providing the framework, benchmarking, and information that companies need to incorporate best-in-class DEI into every area of the organization.”
“Like a canary in the coal mine, Kanarys helps organizations ensure healthy work environments by revealing DEI blind spots before they become a problem,” the company said.
“Companies have data on diversity, for example, but they’re not measuring equity or inclusion or looking at the data from an intersectional lens that takes into account multi-variant diversity,” Price noted. “We help companies move beyond just quick fixes by using data to pinpoint problem areas, implement solutions that result in real transformation, and measure the effectiveness of their interventions.”
By creating measurable KPIs across the entire organization, the Company ensures DEI efforts are working via data-informed strategies. “This is how we help companies find where their policies, practices and procedures fall short,” Price said adding that the platform has a dashboard where companies can also see how they compare to other organizations. With NMG, the dashboard can even look at the store-level KPIs for DEI and Belonging.
Price said NMG’s continued commitment to improving their DEI initiatives through data and transparency, along with their dedication to creating a culture of Belonging where their employees can bring their full selves to work, is a true model for the industry.